Jerusalem: Israel on Thursday approved a further stage in plans to build a nine-storey Jewish seminary in the heart of a densely-populated Palestinian neighbourhood near Jerusalem`s Old City.

According to the Peace Now settlement watchdog, the committee threw out an appeal tabled by a leftwing council member and approved a new stage in plans for a tower block in Sheikh Jarrah in annexed east Jerusalem.

Should the plans be approved by the district planning committee, construction could begin within the coming year, Peace Now`s Hagit Ofran told AFP.

"It might take six months to a year until it gets final approval for them to start building," she said of the plan which was tabled in February.

The building will be used as a yeshiva, or Jewish seminary, for ultra-Orthodox Jews.

Sheikh Jarrah is a Palestinian residential neighbourhood located to the north of the Old City.

The area, which is home to around 2,700 Palestinians, includes well-known landmarks, such as Orient House, the American Colony Hotel and the Palestinian National Theatre, as well as many consular missions.

Located on the road which links the Old City to Mount Scopus, the area is considered a strategic location and settlement groups have made persistent efforts to take control of its land.

Israel captured east Jerusalem during the Six-Day War of 1967 and later annexed it in a move never recognised by the international community.

It considers all of Jerusalem its "eternal, indivisible" capital and does not see construction in the eastern sector as settlement building.

Both the Palestinians and the international community consider all Israeli construction on land seized in 1967 to be a violation of international law.